Asia drives growth at Richemont, according to recent figures
In a trading update released Wednesday, Richemont revealed that Asia remains the main driver of growth for its many brands. Those brands include Cartier, Van Cleef & Arpels, and Piaget, amongst many others, and sales across them all increased by 12% over the five months to August (10%, if you factor in fluctuations in exchange rates).
Richemont’s share price is up by 40% so far this year
SOURCE: Yahoo Finance
In Asia, those sales figures were considerably higher. Excluding Japan, the company saw growth of 23% (22% at constant currency), and in Japan, sales were up by 11% (6% in constant currency). For the year to end-March, sales in Asia grew by an impressive 37%.
Asia has returned to form for Richemont after years of muted performance, caused in large part by Beijing’s anti-austerity drive. However, with the luxury sector seeing a strong performance in the country so far this year, the world’s second-largest luxury company is reaping the benefits.
Other regions were less impressive, but positive nonetheless. The Americas posted growth of 9% - significantly less than the 17% growth posted for the full year – and European growth was 3%. In the Middle East and Africa, growth came in at 2% (1% in constant currency).
These figures may empower chairman Johann Rupert, who was less transparent than some investors may have hoped when, following May results, he declined to explain how he was going to reinvigorate the company. At the time, he said: “Either you trust us or you sell your shares.” Those who did trust hom wil be feeling pretty good about it now.
Dominion holds Richemont in its Global Trends Luxury Fund.
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